DEF 14A of Robert Half Inc., Apr 18, 2018

DEF 14A of Robert Half Inc.

Filed Apr 18, 2018 · FY20170001193125-18-120834

Open on EDGAR

  1. NOMINATION AND ELECTION OF DIRECTORS

    NOMINATION AND ELECTION OF DIRECTORS There are six nominees for director. All of the nominees are presently directors of the Company. The present term of office of all directors will expire upon election of directors at the Meeting. The full Board of Directors will be elected at the Meeting to hold office until the next annual meeting and until their successors are elected. Proxies cannot be voted for more than six persons. Directors are elected by a majority of the votes cast at the Meeting. Proxies solicited by the Board will be voted “FOR” the election of the nominees named below unless stockholders specify in their proxies to the contrary. Although the Board does not expect any nominee to become unavailable to serve as a director for any reason, should that occur before the Meeting, proxies will be voted for the balance of those named and such substitute nominee as may be selected by the Board.

  2. Directors

    Directors The following table lists the name of each nominee for election as director, the age on the date of the Meeting and the year current service as a director began.

  3. Directors

    | Name | Age | Director Since | | Harold M. Messmer, Jr. | 72 | 1982 | | Marc H. Morial | 60 | 2016 | | Barbara J. Novogradac | 57 | 2009 | | Robert J. Pace | 55 | 2009 | | Frederick A. Richman | 72 | 2008 | | M. Keith Waddell | 61 | 1999 |

  4. Directors

    Biographical Information Mr. Messmer has been Chairman of the Board since 1988 and Chief Executive Officer since 1987. From 1985 through 2004, he also served as President. Mr. Morial has been President and Chief Executive Officer of the National Urban League, the largest historic civil rights organization in the United States, since 2003. From 1994 to 2002, he served as Mayor of the City of New Orleans. Mr. Morial also served on the independent advisory board of the Company’s Protiviti Inc. subsidiary from 2009 until his election to the Board in March 2016. Ms. Novogradac has been President of Novogradac Investment Company, a private real estate investment company that invests in residential rental properties, land development opportunities and light industrial commercial assets, since 2001. From 1990 to 2001, Ms. Novogradac held various positions with the Company, including Senior Vice President and Controller. Mr. Pace is the founder and Chief Executive Officer of HundredX, Inc., a privately held technology company. Mr. Pace is also a retired partner and managing director of Goldman, Sachs & Co. He was with Goldman Sachs for over twenty years and held numerous senior leadership positions with that firm. Mr. Richman has been a consultant to Deloitte Tax, LLP since 2008. From 2001 to 2008, he was a Principal with Deloitte Tax, LLP. Prior to 2001, he was a senior partner with O’Melveny & Myers LLP, a law firm. Mr. Richman also served as a director of the Company from 1994 through 2001. Mr. Waddell has been Vice Chairman of the Board since 1999, President since 2004 and Chief Financial Officer since 1988. He served as Treasurer from 1987 until 2004. Other Public Company Directorships 2013 to the Present Mr. Morial serves on the board of ShotSpotter, Inc. (NASDAQ: SSTI) (“ShotSpotter”), a gunshot detection solutions business, since September 2015 and serves as a member of the audit and nominating and corporate governance committees for ShotSpotter. Mr. Morial also served on the board of directors of Corinthian Colleges, Inc., a for-profit post-secondary education company, from April 27, 2013 to August 2015. No other directors serve on other public company boards. Qualification to Serve as Director The Nomination and Governance Committee has determined that each of the nominees is qualified to continue to serve as a director of the Company. The reasons for these determinations are as follows: Mr. Messmer has been Chairman since 1988 and Chief Executive Officer since 1987, during which time he has directed and presided over the Company’s substantial growth. More details regarding Mr. Messmer and the Company’s growth during his tenure is contained below in the section titled “Board of Directors Leadership Structure.” He has been a director since 1982. Mr. Morial has substantial leadership experience, having served as President and Chief Executive Officer of the National Urban League from 2003 through the present, following two terms as the Mayor of the City of New Orleans from 1994 to 2002. Mr. Morial was a member of the independent advisory board of the Company’s Protiviti Inc. subsidiary from 2009 until March 2016. Ms. Novogradac has financial expertise derived from her experience as president of a real estate investment company, with a major public accounting firm and as the former controller of the Company. Mr. Pace has management and leadership experience as the Chief Executive of HundredX, Inc., a privately held technology company, and Mr. Pace has substantial investment banking experience as a former senior member of Goldman, Sachs & Co., including service on its Investment Banking Division’s global Operating Committee. Mr. Richman has financial expertise as a senior tax expert with both O’Melveny & Myers LLP, a law firm, and Deloitte Tax, LLP. He served as a director of the Company from 1994 through 2001 and from 2008 through the present. Mr. Waddell has more than 25 years of service as Chief Financial Officer, during which time the Company experienced substantial growth, and has been a director since 1999. The table below summarizes key qualifications, skills and attributes most relevant to the decision to nominate the candidates to serve on the Board. A mark indicates a specific area of focus or experience on which the Board relies most. Each director nominee’s biography stated above describes the nominee’s qualifications and relevant experience in more detail.

  5. Directors

    | Director Nominees | Relevant CEO/President Experience | High Level of Financial Literacy | Diversity of Gender, Race or Cultural Background | Global Business Experience | Extensive Knowledge of the Company’s Business or Industry | Risk Oversight/ Management Experience | | Harold M. Messmer, Jr. | X | X | | X | X | X | | Marc H. Morial | X | X | X | X | X | X | | Barbara J. Novogradac | X | X | X | X | X | X | | Robert J. Pace | X | X | | X | X | X | | Frederick A. Richman | X | X | | X | X | X | | M. Keith Waddell | X | X | | X | X | X |

  6. Executive Summary

    | was achieved at 95% of target net income and 99% of target revenue. As a result, bonuses for 2017 were equal to 96.6% of 2017 target bonuses. • All equity awards issued to executive officers during 2017 were again 100% performance shares. Performance share grants were subject to three-year cliff vesting and two performance conditions—an annual EPS goal and a modifier based on three-year cumulative return on invested capital (“ROIC”) relative to the three-year cumulative ROIC of an industry peer group. The Compensation Committee selected relative ROIC as a performance measure for the 2017 performance share grants rather than total stockholder return (“TSR”) as in previous years because institutional stockholders are placing a greater emphasis on how pay for performance aligns with operational performance, and capital allocation, including ROIC, is often a discussion topic with our largest stockholders. Target payouts require 65th percentile relative performance with maximum reduction occurring for performance at or below the 50th percentile. |

  7. Compensation Risk and Governance

    | Hedging and Pledging Policy | The Company does not allow any pledging or hedging of Company stock by directors, officers, and employees. | | Director Elections | The Company’s By-laws provide for a plurality standard in contested elections. | | Maximum Award Amounts | The Compensation Committee establishes caps on maximum awards with appropriate balance between long-term and short-term objectives. | | No Dividends on Unearned Shares | Equity awards do not receive dividends until all performance conditions and time vesting requirements have been satisfied. Dividends declared prior to the satisfaction of all requirements are accrued but not paid until the shares vest. If a portion of the award is forfeited, the accrued dividends on that portion will also be forfeited. | | Clawback Policy | The Compensation Committee has adopted an Executive Compensation Clawback Policy, which provides if there has been a material negative restatement of the Company’s financial statement |

  8. Compensation Risk and Governance

    | | filed with the SEC due to the fraud or intentional misconduct by an NEO, the Board may recover incentive payments from the NEO (annual cash bonus and equity based compensation), in accordance with delineated procedures in the policy. This policy is available on the Company’s website at www.roberthalf.com in the “Corporate Governance” section under “Investor Center.” The Company has never restated its financial statements. | | Severance Benefits Policy | The Compensation Committee has a “Compensation Committee Policy Regarding Severance Benefits for Executive Officers,” pursuant to which future severance agreements with any executive officer shall not, individually or in the aggregate, provide severance benefits, as defined in the policy, that exceed 2.99 times the sum of such executive officer’s base salary and annual bonus. This policy is available on the Company’s website at www.roberthalf.com in the “Corporate Governance” section under “Investor Center.” No executive officer has ever been terminated under circumstances that required severance payments. | | Share Ownership Policy | The Board of Directors has a policy regarding minimum required share ownership by the Company’s executive officers requiring each officer to own shares of the Company equal to six times the officer’s base salary. Details regarding such policy are available on the Company’s website at www.roberthalf.com in the “Corporate Governance” section under “Investor Center.” Pursuant to such policy, the minimum number of shares that Messrs. Messmer, Waddell, Gentzkow, Glass, and Buckley are required to own are 184,643, 93,201, 93,201, 72,099, and 55,198, respectively. Each such officer owns significantly more shares than the minimum requirement. The Board of Directors has also adopted a policy regarding minimum required share ownership by the Company’s directors as described in more detail in the “Director Compensation” section below. | | No Excise Tax Gross-Up Payments | The Compensation Committee has established that no excise tax gross-up payments shall be made to executive officers or outside directors in the event of a change in control. | | No Perquisites | Consistent with prior fiscal years, executive officers received no perquisites during 2017. | | Independent Compensation Consultant | The Compensation Committee retains an independent compensation consultant that reports directly to the Compensation Committee. | | Alignment with Operational Performance | In 2017, the Company utilized a relative ROIC metric in the performance share program to align compensation with operational performance. Target |

  9. Compensation Risk and Governance

    | | payouts were set at the 65th percentile level of performance, with maximum forfeitures occurring for performance below the 50th percentile. | | Employment Agreements | No employment agreements provide for guaranteed multi-year increases in salary, non-performance-based bonuses or equity compensation. | | Annual Risk Assessments | The Compensation Committee conducts annual assessments to identify and mitigate risk in compensation programs. | | No Repricing | Our Stock Incentive Plan expressly prohibits repricing or repurchasing equity awards that are under water. |

  10. 2017 Compensation Highlights

    | Base Salary | No Change | | Cash Bonus | 8.5% | | Grant Date Fair Value of Performance Shares | -5% |

  11. 2017 Compensation Highlights

    | Annual Performance Bonus Plan and Performance Share Goals • Annual Performance Bonus Plan: The Annual Performance Bonus Plan goals are based on achieving certain levels of revenue and net income such that both top-line and bottom-line results are considered. • 2017 Performance Shares: The performance share goals of EPS and ROIC emphasize our one-year EPS against target and our three-year cumulative ROIC relative to the three-year cumulative ROIC of an industry peer group. Also, the executive must remain employed through the third anniversary of the grant date. The above operational goals were based on our strategic plan for 2017 and consensus Wall Street estimates. |

  12. 2017 Compensation Highlights

    2017 Annual Performance Bonus Plan The 2017 bonus award was computed in accordance with a formula whereby the ratio of actual performance relative to target performance is applied directly to target bonuses on a one-for-one basis. For example, if actual performance relative to each of the specified metrics exceeds target by 20%, then actual bonuses exceed target by 20%. As noted above, the Compensation Committee selected revenue and net income as the metrics to emphasize both top line and bottom line performance and avoid any duplication of metrics under the Annual Performance Bonus Plan and the Stock Incentive Plan. For 2017, the Compensation Committee provided that each individual’s actual bonus would be determined by weighting 20% to the ratio of actual revenue to target revenue and 80% to the ratio of actual net income to target net income. For this purpose, the Compensation Committee provided that actual revenue and actual net income would be determined in accordance with GAAP, excluding the impact of changes in GAAP or tax laws but only if such changes impacted revenue by 5% or more and/or net income by $4,000,000 or more. However, no bonus can exceed the lesser of twice the target bonus or $9,000,000 and no bonus would be paid to any executive if actual net income for 2017 were less than zero. See the “2017 Grants of Plan-Based Awards” table on page 24 for a complete description of the plan. For 2017, target bonus awards, target metrics and actual results, and actual bonus awards were as follows:

  13. 2017 Compensation Highlights

    | | 2017 Target | 2017 Target Growth | 2017 Results | | Satisfaction of Performance Metrics (% of Target) | | Revenue (20% weight) | $5.284 B | 0.64% | $5.267 | B | 99% | | Net Income (80% weight) | $339 M | -1.42% | $324 | M* | 95% | | Cumulative | | | | | 96.6% |

  14. 2017 Compensation Highlights

    | | Target Bonus | Actual Bonus | Actual Bonus as Percentage of Target | | Mr. Messmer | $3,121,607 | $3,014,979 | | | Mr. Waddell | $2,263,599 | $2,186,279 | | | Mr. Gentzkow | $2,037,239 | $1,967,651 | 96.6% | | Mr. Glass | $641,351 | $619,444 | | | Mr. Buckley | $735,000 | $709,894 | |

  15. 2017 Compensation Highlights

    The ROIC Modifier ROIC performance against the 65th percentile ROIC of an industry peer group consisting of companies (other than the Company) in the 4-digit GICS code 2020 Commercial & Professional Services sub-industry (market capitalization exceeding $100 million) (the “Industry Peer Group”) as measured during the Measurement Period can increase or decrease the number of shares subject to an award by up to 25%. If the Company’s ROIC ranking for the Measurement Period is below the 65th percentile of the Industry Peer Group, the number of shares subject to each award will be decreased by the percentage determined by multiplying the percentage point difference between the 65th percentile of the Industry Peer Group and the Company’s ROIC ranking by 25/15 (with a proportionate reduction for fractions of a percentage point), up to a maximum decrease of 25% if the Company’s ROIC ranking is at or below the 50th percentile. If the Company’s ROIC ranking is above the 65th percentile of the Industry Peer Group, the number of shares subject to each award will be increased by the percentage determined by multiplying the percentage point difference between the 65th percentile of the Industry Peer Group and the Company’s ROIC ranking by 25/20 (with a proportionate increase for fractions of a percentage point), up to a maximum increase of 25% if the Company’s ROIC ranking is at or above the 85th percentile. However, if the Company’s ROIC ranking is at the 65th percentile of the Industry Peer Group, no adjustment will be made to an award. For example, if the Company’s relative ROIC is at the 59th percentile of the Industry Peer Group, then 10% of the total shares subject to an award (the percentage determined by multiplying the percentage point difference between the 65th percentile of the Industry Peer Group and the Company’s ROIC ranking at the 59th percentile (i.e. 6%) by 25/15) will be forfeited. In establishing the ROIC formula, the Compensation Committee provided that to the extent changes in GAAP and changes in tax law reduce or increase the Company’s ROIC by 10% or more, such changes will be excluded in calculating the Company’s ROIC and the ROIC of each of the members of the Industry Peer Group. Time Vesting Requirement Each 2017 performance share grant will vest in full on the third anniversary of the grant date on a cliff basis, subject to the executive’s service through the vest date. Notwithstanding the foregoing, the time vesting requirement (but not the EPS requirement or the ROIC requirement) is waived upon the recipient’s death or termination of employment due to total and permanent disability. No portion of the 2017 performance share grant may be released to the recipient until such portion is no longer subject to any of the three requirements (EPS, TSR and time vesting). Realized 2015 Performance Shares As described in the proxy statement for our 2015 annual meeting of stockholders, the performance share awards granted to executive officers during 2015 were subject to a TSR requirement that provided for an increase or decrease of the number of shares subject to each executive’s award (after taking into account the impact of the EPS condition) by as much as 50% based on how the Company’s TSR percentile ranking for the period from January 1, 2015 through December 31, 2017, compared to an industry GICS index peer group for the same period. If the Company’s TSR percentile ranking was below the 50th percentile, 3 1/3% of the award would be forfeited for each percentile below the 50th percentile, with a proportionate reduction for fractions of a percentile, up to a maximum decrease of 50% of the award at the 35th percentile or below. If the Company’s TSR percentile ranking was above the 50th percentile, the award would be increased by 3 1/3% for each percentile above the 50th percentile, with a proportionate increase for fractions of a percentile, up to a maximum increase of 50% of the award at the 65th percentile or above. The 2015 performance share awards were also subject to a time vesting requirement which provided that each award would vest in full on the third anniversary of the grant date, or March 30, 2018, subject to the executive providing service through such vest date. Following the completion of the three-year TSR performance cycle, the 2015 performance awards were earned at 50% of the target shares.

  16. 2017 Compensation Highlights

    | | Target 2015 Performance Shares | (Forfeited) Shares | Total 2015 Performance Shares | | Mr. Messmer | 86,472 | (43,236) | 43,236 | | Mr. Waddell | 68,779 | (34,390) | 34,389 | | Mr. Gentzkow | 58,234 | (29,117) | 29,117 | | Mr. Glass | 15,228 | (7,614) | 7,614 | | Mr. Buckley | 18,736 | (9,368) | 9,368 |

  17. Other Benefits

    Other Benefits As indicated by the tables appearing below, in addition to the foregoing compensation, each executive also participates in non-tax-qualified deferred compensation arrangements. The Compensation Committee considers deferred compensation arrangements to be appropriate for a corporation of the Company’s size, and, in light of the moderate salaries and long service and historical results of management, believes that the amounts have been set at reasonable levels, particularly in light of the fact that the Company does not provide tax-qualified retirement arrangements for these executives. A detailed description of how the deferred compensation arrangements operate is set forth below in the two paragraphs under the “Nonqualified Deferred Compensation” table. For 2017 (and for the previous seven years), Mr. Messmer has requested, and the Compensation Committee has agreed, that no amount be allocated to him for fiscal 2017 under the Company’s Deferred Compensation Plan and that he not receive any above-market or preferential interest on his accrued amounts. Various agreements, as described elsewhere in this proxy statement, provide for severance benefits in the event of a termination of employment before or after a change in control. (See the discussion below in connection with the “Nonqualified Deferred Compensation” table and the discussion below under the heading “Employment Agreement and Potential Payments upon Termination or Change in Control.”) As indicated by such text, the triggering events and benefits vary among each such arrangement, plan or agreement, and the severance benefits do not include for any executive officer an excise tax gross-up payment. Such triggering events and benefits were selected by the Compensation Committee in light of competitive conditions and customary practices at the time of their implementation, and the Compensation Committee believes that they continue to be reasonable.

  18. 2017 Summary Compensation Table

    2017 Summary Compensation Table The following table summarizes compensation for the Named Executive Officers (the Chief Executive Officer, the Chief Financial Officer and the three other executive officers who had the highest compensation for 2017) in accordance with SEC rules.

  19. 2017 Summary Compensation Table

    | | | | | | | | | Change in Pension Value and Nonqualified Deferred Compensation Earnings | | | | | | | | Stock Awards | | | | | | | | Name and Principal Position | Year | Salary | Bonus | Number of Shares | Value(a) | Option Awards | Non-Equity Incentive Plan Compensation(b) | | All Other Compensation(c) | Total | | Harold M. Messmer, Jr. Chairman and Chief Executive Officer | 2017 | $525,000 | $0 | 110,836 | $5,259,168 | $0 | $3,014,979 | $0 | $0 | $8,799,147 | | | 2016 | $525,000 | $0 | 120,541 | $5,536,448 | $0 | $2,778,592 | $0 | $0 | $8,840,040 | | | 2015 | $525,000 | $0 | 86,472 | $6,213,878 | $0 | $3,120,343 | $0 | $0 | $9,859,221 | | M. Keith Waddell Vice Chairman, President and Chief Financial Officer | 2017 | $265,000 | $0 | 88,158 | $4,183,097 | $0 | $2,186,279 | $0 | $367,692 | $7,002,068 | | | 2016 | $265,000 | $0 | 95,877 | $4,403,631 | $0 | $2,014,866 | $0 | $341,980 | $7,025,477 | | | 2015 | $265,000 | $0 | 68,779 | $4,942,459 | $0 | $2,262,682 | $0 | $379,152 | $7,849,293 | | Paul F. Gentzkow President and Chief Operating Officer- Staffing Services | 2017 | $265,000 | $0 | 74,641 | $3,541,715 | $0 | $1,967,651 | $0 | $334,898 | $6,109,264 | | | 2016 | $265,000 | $0 | 81,177 | $3,728,460 | $0 | $1,813,379 | $0 | $311,757 | $6,118,596 | | | 2015 | $265,000 | $0 | 58,234 | $4,184,695 | $0 | $2,036,414 | $0 | $345,212 | $6,831,321 | | Robert W. Glass Executive Vice President, Corporate Development | 2017 | $245,000 | $0 | 19,518 | $926,129 | $0 | $619,444 | $0 | $129,666 | $1,920,239 | | | 2016 | $245,000 | $0 | 21,227 | $974,956 | $0 | $570,877 | $0 | $122,382 | $1,913,215 | | | 2015 | $245,000 | $0 | 15,228 | $1,094,284 | $0 | $641,091 | $0 | $132,914 | $2,113,289 | | Michael C. Buckley Executive Vice President, Chief Administrative Officer and Treasurer | 2017 | $265,000 | $0 | 24,014 | $1,139,464 | $0 | $709,894 | $0 | $146,234 | $2,260,592 | | | 2016 | $265,000 | $0 | 26,117 | $1,199,554 | $0 | $654,235 | $0 | $137,885 | $2,256,674 | | | 2015 | $265,000 | $0 | 18,736 | $1,346,369 | $0 | $734,702 | $0 | $149,955 | $2,496,026 |

  20. 2017 Summary Compensation Table

    | (a) The amounts in this column represent grant date fair value of performance share grants computed in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718. For 2015 and 2016 grants, the value was determined by an independent valuation firm using the Monte-Carlo Simulation Method. For 2017 grants, the grant date fair value was determined using the closing price of the Company’s common stock on grant date multiplied by the number of shares subject to the award. Pursuant to the SEC rules, the amounts shown exclude the impact of estimated forfeitures related to service-based vesting and potential forfeitures pursuant to the TSR or ROIC modifier performance conditions described in the CD&A for fiscal 2017, fiscal 2016, and fiscal 2015. Assuming the highest level of performance is achieved under the applicable performance conditions, the maximum possible value of the awards granted to Mr. Messmer, Mr. Waddell, Mr. Gentzkow, Mr. Glass and Mr. Buckley in fiscal 2017 on the grant date is $6,573,960, $5,228,871, $4,427,144, $1,157,661 and $1,424,330, respectively. |

  21. 2017 Summary Compensation Table

    | (b) Consists of cash payments made under the Annual Performance Bonus Plan, as described below in the “Grants of Plan-Based Awards” table. |

  22. 2017 Summary Compensation Table

    | (c) The amounts in this column for 2017 consist of allocations pursuant to defined contribution plans, as described in the “Nonqualified Deferred Compensation” table. |

  23. 2017 Grants of Plan-Based Awards

    2017 Grants of Plan-Based Awards

  24. 2017 Grants of Plan-Based Awards

    | Name | Grant Date | Estimated Future Payouts Under Non-Equity Incentive Plan Awards(a) | | | Estimated Future Payouts Under Equity Incentive Plan Awards(b) | | | All Other Stock Awards: Number of Shares or Stock or Units | All Other Option Awards: Number of Securities Underlying Options | Exercise or Base Price of Option Awards | Grant Date Fair Value of Stock and Option Awards(c) | | | | Threshold(a) | Target | Maximum | Threshold | Target | Maximum | | | | | | Harold M. Messmer, Jr. | n/a | $0 | $3,121,607 | $6,243,214 | n/a | n/a | n/a | n/a | n/a | n/a | n/a | | M. Keith Waddell | n/a | $0 | $2,263,599 | $4,527,198 | n/a | n/a | n/a | n/a | n/a | n/a | n/a | | Paul F. Gentzkow | n/a | $0 | $2,037,239 | $4,074,478 | n/a | n/a | n/a | n/a | n/a | n/a | n/a | | Robert W. Glass | n/a | $0 | $641,351 | $1,282,702 | n/a | n/a | n/a | n/a | n/a | n/a | n/a | | Michael C. Buckley | n/a | $0 | $735,000 | $1,470,000 | n/a | n/a | n/a | n/a | n/a | n/a | n/a | | Harold M. Messmer, Jr. | 3/28/17 | n/a | n/a | n/a | 0 | 110,836 | 138,545 | 0 | 0 | n/a | $5,259,168 | | M. Keith Waddell | 3/28/17 | n/a | n/a | n/a | 0 | 88,158 | 110,197 | 0 | 0 | n/a | $4,183,097 | | Paul F. Gentzkow | 3/28/17 | n/a | n/a | n/a | 0 | 74,641 | 93,301 | 0 | 0 | n/a | $3,541,715 | | Robert W. Glass | 3/28/17 | n/a | n/a | n/a | 0 | 19,518 | 24,397 | 0 | 0 | n/a | $926,129 | | Michael C. Buckley | 3/28/17 | n/a | n/a | n/a | 0 | 24,014 | 30,017 | 0 | 0 | n/a | $1,139,464 |

  25. 2017 Grants of Plan-Based Awards

    | (a) These columns represent the potential awards under the Annual Performance Bonus Plan. Maximum payouts would result in the event of actual revenue of $10.92 billion and actual net income of $794 million, and no payouts would result in the event of actual revenue of $0 and actual net income of $0. See below and on page 16 for a description of the Annual Performance Bonus Plan. |

  26. 2017 Grants of Plan-Based Awards

    | (b) These columns represent the performance share grants made in fiscal 2017. The maximum number of shares that can be earned is 125% of the target number of shares based on achievement of an EPS goal modified by the Company’s ROIC ranking relative to an industry peer group. See below and on page 25 for a description of the grants. |

  27. 2017 Grants of Plan-Based Awards

    | (c) For 2017 grants, the grant date fair value was determined using the closing price of the Company’s common stock on the grant date multiplied by the number of shares subject to the award. |

  28. 2017 Grants of Plan-Based Awards

    Description of the 2017 Cash Bonuses Non-equity awards consist of an annual cash bonus opportunity pursuant to the Annual Performance Bonus Plan, which was originally approved by stockholders in 1994 and was most recently re-approved by stockholders in 2013. The target bonus amount is set by the Compensation Committee, which also adopts target performance metrics. For 2017, the Compensation Committee selected revenue and net income as the metrics to emphasize both top line and bottom line performance and eliminate the duplication of metrics under the Annual Performance Bonus Plan and the Stock Incentive Plan. For 2017, the target metric for revenue was $5.284 billion and for net income was $338.5 million. Target bonuses for 2017 were set at the same amounts as 2016 target bonuses without increase. For 2017, each individual’s actual bonus was determined by weighting 20% to the ratio of actual revenue to target revenue and 80% to the ratio of actual net income to target net income. (For example, if actual revenue had been 80% of target revenue and actual net income had been 90% of target net income, then each executive would have received 88% of his target bonus.) For this purpose, the Compensation Committee provided that actual revenue and actual net income would be determined in accordance with GAAP, excluding the impact of changes in GAAP and tax laws but only if such changes impacted revenue by 5% or more and/or net income by $4,000,000 or more. However, no bonus can exceed the lesser of twice the target bonus or $9,000,000, and no bonus would be paid to any executive if actual net income for 2017 were less than zero. The Compensation Committee has the discretion to reduce any bonus within limits specified in the plan, but has no discretion to increase any bonus above the amount that would be determined by the formula. Bonuses are subject to the Company’s Clawback Policy, which is available on the Company’s website at www.roberthalf.com in the “Corporate Governance” section under “Investor Center.” The measurement period for the grants appearing in the table was the 2017 calendar year (which is also the Company’s fiscal year), so the actual final bonuses pursuant to this plan have been determined and are reported in the Summary Compensation Table in the “Non-Equity Incentive Plan Compensation” column. For 2017, the target revenue and net income were $5.284 billion and $338.5 million, respectively, and the actual revenue and net income were $5.27 billion and $324 million, respectively. In determining net income, the Compensation Committee excluded the impact of the reduction in the value of the Company’s deferred tax assets which resulted from certain changes in tax law due to the adoption of the Tax Cuts and Jobs Act. As a result, actual bonuses for 2017 were equal to 96.6% of target bonuses. Description of the 2017 Performance Share Grants Since 2004, stock awards to executive officers have consisted exclusively of performance share grants made pursuant to the Stock Incentive Plan, which plan was approved by the stockholders in 2005 and was most recently re-approved by stockholders in 2014. Each of the 2017 grants was 100% performance based and subject to a three-year cliff time vesting requirement measured from the date of grant. The two performance conditions consisted of: (i) one-year EPS against target and (ii) our three-year cumulative percentage of ROIC ranking relative to the three-year cumulative ROIC results of an industry peer. Performance against the annual EPS goal can only result in either no change to the number of the shares possible to be earned based on relative ROIC performance or a reduction in the number of shares if the goal is not attained. If actual EPS for 2017 is less than the target EPS, then the award will be reduced by a percentage equal to the percentage by which actual EPS for 2017 falls short of the target EPS. It is not possible to earn an above-target number of performance shares for exceeding the EPS goal. For 2017, the target EPS established by the Compensation Committee and actual EPS are set forth below. In establishing the target EPS, the Compensation Committee provided that to the extent changes in GAAP and changes in tax law impact the Company’s EPS by $0.03 or more, such changes will be excluded in calculating the Company’s EPS. Actual adjustments based on the EPS modifier and relative ROIC ranking will be made after the Compensation Committee certifies such adjustments following the completion of the three-year performance period. In setting the target, the Compensation Committee considered the Company’s annual strategic plan, consensus Wall Street estimates and other items, including share repurchases that are to be funded exclusively with operating cash flow.

  29. 2017 Grants of Plan-Based Awards

    | | 2017 Target Goal | 2017 Result | Satisfaction of First Performance Metric (% of Target) | | Earnings Per Share | $2.67 | $2.60* | 97% |

  30. 2017 Grants of Plan-Based Awards

    | * In determining EPS, the Compensation Committee adjusted GAAP EPS for the 2017 one-time, non-cash charge to income taxes related to the enactment of the Tax Cuts and Jobs Act, pursuant to its pre-established formula. See Appendix A for a reconciliation of the adjusted (non-GAAP) EPS to GAAP EPS. |

  31. 2017 Grants of Plan-Based Awards

    ROIC performance against the 65th percentile ROIC of an industry peer group consisting of companies (other than the Company) in the 4-digit GICS code 2020 Commercial & Professional Services sub-industry (market capitalization exceeding $100 million) (the “Industry Peer Group”) as measured during the Measurement Period can increase or decrease the number of shares subject to an award by up to 25%. If the Company’s ROIC ranking for the Measurement Period is below the 65th percentile of the Industry Peer Group, the number of shares subject to each award will be decreased by the percentage determined by multiplying the percentage point difference between the 65th percentile of the Industry Peer Group and the Company’s ROIC ranking by 25/15 (with a proportionate reduction for fractions of a percentage point), up to a maximum decrease of 25% if the Company’s ROIC ranking is at or below the 50th percentile. If the Company’s ROIC ranking is above the 65th percentile of the Industry Peer Group, the number of shares subject to each award will be increased by the percentage determined by multiplying the percentage point difference between the 65th percentile of the Industry Peer Group and the Company’s ROIC ranking by 25/20 (with a proportionate increase for fractions of a percentage point), up to a maximum increase of 25% if the Company’s ROIC ranking is at or above the 85th percentile. However, if the Company’s ROIC ranking is at the 65th percentile of the Industry Peer Group, no adjustment will be made to an award. For example, if the Company’s relative ROIC is at the 59th percentile of the Industry Peer Group then 10% of the total shares subject to an award (the percentage determined by multiplying the percentage point difference between the 65th percentile of the Industry Peer Group and the Company’s ROIC ranking at the 59th percentile (i.e. 6%) by 25/15) will be forfeited. In establishing the ROIC formula, the Compensation Committee provided that to the extent changes in GAAP and changes in tax law reduce or increase the Company’s ROIC by 10% or more, such changes will be excluded in calculating the Company’s ROIC and the ROIC of each of the members of the Industry Peer Group. The time vesting requirement provides that the 2017 award vests 100% on the third anniversary of the grant date. Notwithstanding the foregoing, the time vesting requirement (but not the EPS requirement or the ROIC requirement) is waived upon the recipient’s death or termination of employment due to total and permanent disability. No portion of the 2017 performance share award may be released to the recipient until such portion is no longer subject to any of the three requirements (EPS, ROIC and time vesting). However, even after shares constituting part of a performance share award are released, they are still subject to the Company’s Clawback Policy, which is available on the Company’s website at www.roberthalf.com in the “Corporate Governance” section under “Investor Center.” Performance share grants made do not receive dividends until all requirements have been satisfied. Dividends declared prior to the satisfaction of all requirements are accrued but not paid. If a portion of the award is forfeited, the accrued dividends on that portion will also be forfeited.

  32. Outstanding Equity Awards at Fiscal Year-End 2017

    Outstanding Equity Awards at Fiscal Year-End 2017

  33. Outstanding Equity Awards at Fiscal Year-End 2017

    | Name | Number of Shares or Units of Stock That Have Not Vested(a) | Market Value of Shares or Units of Stock That Have Not Vested(b) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested(c) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested(b) | | Harold M. Messmer, Jr. | 43,236 | $2,401,327 | 231,377(d) | $12,850,679 | | M. Keith Waddell | 34,389 | $1,909,965 | 184,035(e) | $10,221,304 | | Paul F. Gentzkow | 29,117 | $1,617,158 | 155,818(f) | $8,654,132 | | Robert W. Glass | 7,614 | $422,882 | 40,745(g) | $2,262,977 | | Michael C. Buckley | 9,368 | $520,299 | 50,131(h) | $2,784,276 |

  34. Outstanding Equity Awards at Fiscal Year-End 2017

    | (a) Unvested performance share awards that were granted on March 30, 2015, with respect to which, as of December 31, 2017, all performance periods have been completed, the determination of the final award has been certified by the Compensation Committee, and any applicable adjustments have been made. These earned but unvested shares vested on March 30, 2018. |

  35. Outstanding Equity Awards at Fiscal Year-End 2017

    | (b) The market value of unvested stock awards was calculated by valuing each share at $55.54, which was the closing price of the Company’s Common Stock on the New York Stock Exchange on the last trading day of 2017. |

  36. Outstanding Equity Awards at Fiscal Year-End 2017

    | (c) Unvested performance share awards with respect to which all performance periods have not been completed on December 31, 2017 which were granted on March 23, 2016 and March 28, 2017, respectively. Each of the awards is 100% performance based: subject to (1) reduction based on EPS for 2016 in the case of the 2016 grants and EPS for 2017 in the case of the 2017 grants (a reduction was made for the 2016 grant), (2) reduction or increase based on TSR for the three-year period from January 1, 2016 through December 31, 2018 in the case of the 2016 grants and reduction or increase based upon our three-year cumulative percentage of ROIC ranking relative to the three-year cumulative ROIC results of an industry peer group in the case of the 2017 grants, and (3) time vesting on a three-year cliff basis from the date of grant subject to the applicable named executive officer being employed through such date. The amounts listed below are equal to the target amount and assumes employment through the applicable vesting date. |

  37. Outstanding Equity Awards at Fiscal Year-End 2017

    | (d) Of such shares, 120,541 vest on March 23, 2019 and 110,836 vest on March 28, 2020. |

  38. Outstanding Equity Awards at Fiscal Year-End 2017

    | (e) Of such shares, 95,877 vest on March 23, 2019 and 88,158 vest on March 28, 2020. |

  39. Outstanding Equity Awards at Fiscal Year-End 2017

    | (f) Of such shares, 81,177 vest on March 23, 2019 and 74,641 vest on March 28, 2020. |

  40. Outstanding Equity Awards at Fiscal Year-End 2017

    | (g) Of such shares, 21,227 vest on March 23, 2019 and 19,518 vest on March 28, 2020. |

  41. Outstanding Equity Awards at Fiscal Year-End 2017

    | (h) Of such shares, 26,117 vest on March 23, 2019 and 24,014 vest on March 28, 2020. |

  42. Option Exercises and Stock Vested in 2017

    Option Exercises and Stock Vested in 2017

  43. Option Exercises and Stock Vested in 2017

    | Name | Number of Shares Acquired on Exercise(a) | Value Realized on Exercise | Number of Shares Acquired on Vesting (b) | Value Realized on Vesting (c) | | Harold M. Messmer, Jr. | — | — | 121,979 | $5,956,235 | | M. Keith Waddell | — | — | 97,948 | $4,782,801 | | Paul F. Gentzkow | — | — | 82,528 | $4,029,842 | | Robert W. Glass | — | — | 20,872 | $1,019,180 | | Michael C. Buckley | — | — | 25,906 | $1,264,990 |

  44. Option Exercises and Stock Vested in 2017

    | (a) There are no outstanding options. |

  45. Option Exercises and Stock Vested in 2017

    | (b) This column represents performance share awards granted in 2014 that vested on March 31, 2017. |

  46. Option Exercises and Stock Vested in 2017

    | (c) The value realized on vesting was determined by multiplying the number of performance shares that vested by the closing price of the Company’s Common Stock on the New York Stock Exchange on March 31, 2017 ($48.83). |

  47. 2017 Nonqualified Deferred Compensation

    2017 Nonqualified Deferred Compensation

  48. 2017 Nonqualified Deferred Compensation

    | Name | Executive Contributions in Last Fiscal Year | Registrant Contributions in Last Fiscal Year (a) | Aggregate Earnings in Last Fiscal Year (b) | Aggregate Withdrawals/ Distributions | Aggregate Balance at Last Fiscal Year End (c) | | Harold M. Messmer, Jr. | $0 | $0 | $2,660,038 | $0 | $85,450,027 | | M. Keith Waddell | $0 | $367,692 | $314,795 | $0 | $10,644,371 | | Paul F. Gentzkow | $0 | $334,898 | $267,938 | $0 | $9,081,869 | | Robert W. Glass | $0 | $129,666 | $120,698 | $0 | $4,069,899 | | Michael C. Buckley | $0 | $146,234 | $63,743 | $0 | $2,227,147 |

  49. 2017 Nonqualified Deferred Compensation

    | (a) These amounts appear in the “All Other Compensation” column of the Summary Compensation Table. |

  50. 2017 Nonqualified Deferred Compensation

    | (b) None of the earnings in this column are included in the Summary Compensation Table because they were not preferential or above market. |

  51. 2017 Nonqualified Deferred Compensation

    | (c) A portion of these amounts was previously reported as deferred compensation in the Summary Compensation Tables in the proxy statements for prior annual meetings. |

  52. 2017 Nonqualified Deferred Compensation

    Registrant Contributions for Mr. Messmer are allocated pursuant to the Deferred Compensation Plan. Under the Deferred Compensation Plan, the amount allocated each year to Mr. Messmer is between 3% and 10% of the sum of Mr. Messmer’s base salary and cash bonus (pursuant to the Annual Performance Bonus Plan), depending upon how actual EPS for the year compare to the target set by the Board. Accrued amounts earn interest quarterly at a rate equal to the 10+ Year High Quality yield in the Merrill Lynch Bond Index. For 2017, the quarterly interest rates were 4.05%, 3.80%, 3.74% and 3.55%, respectively. The corresponding 120% long-term quarterly applicable federal rates were 3.30%, 3.18%, 3.09% and 3.13%, respectively. For 2017 (and for the previous seven years) Mr. Messmer requested, and the Compensation Committee agreed, that no amount be allocated to him under the plan for the year and that the interest amounts credited not exceed the amounts set forth in the preceding sentence. The Deferred Compensation Plan provides that all amounts become fully vested after seven years of service, so all amounts in the table for Mr. Messmer are fully vested. All vested amounts are paid following disability or termination of employment for any reason. The amounts in the Deferred Compensation Plan allocated to Mr. Messmer, which include amounts transferred in respect of another plan that was terminated several years ago, reflect benefits earned by Mr. Messmer during more than 30 years of service. Registrant Contributions for Messrs. Waddell, Gentzkow, Glass and Buckley are allocated pursuant to the Senior Executive Retirement Plan, which was established effective December 31, 1995. Under the Senior Executive Retirement Plan, the amount allocated each year for an executive is 15% of the sum of such executive’s base salary and cash bonus (pursuant to the Annual Performance Bonus Plan). Accrued amounts earn interest at a rate equal to Moody’s Corporate Bond Yield Average. For 2017, this interest rate was 3.78% and the corresponding 120% long-term annual applicable federal rate was 3.16%. For 2017, these executive officers requested and the Compensation Committee agreed that the interest amounts credited not exceed the applicable federal rate amounts set forth in the preceding sentence. All allocations are subject to a vesting schedule, which provides that no amount is vested until ten years of service. After ten years of service, the amount vested is 50% plus 4 1/6% for each year over age 50, with 100% vesting thus occurring at age 62. In the event of a Change in Control (see Appendix B for a definition of this term), all amounts credited under the Senior Executive Retirement Plan shall become fully vested and nonforfeitable. Vested accrued amounts are paid following termination of employment. Prior to January 1, 1996, Messrs. Waddell, Gentzkow and Glass participated in the Deferred Compensation Plan. Contributions made prior to such date continue to earn interest as provided by the Deferred Compensation Plan. Of the aggregate balances shown in the table, $841,824, $466,368 and $1,020,776 were unvested as of December 31, 2017, for Messrs. Waddell, Glass and Buckley, respectively. All vested amounts are paid following disability or termination of employment for any reason. Pursuant to the Senior Executive Retirement Plan and resolutions adopted by the Compensation Committee in 1995, in the event of a Change in Control (see Appendix B for a definition of this term), there shall be allocated to Mr. Waddell’s account an amount equal to the product of (a) the number of whole years remaining until Mr. Waddell attains age 62 (1 year as of December 31, 2017) and (b) the last annual allocation for Mr. Waddell made under the Senior Executive Retirement Plan. After such Change in Control allocation has been made, each subsequent annual allocation under the Senior Executive Retirement Plan for Mr. Waddell following the Change in Control and prior to his 62nd birthday shall be reduced by an amount equal to the last annual allocation made to Mr. Waddell prior to the Change in Control.

  53. Employment Agreement and Potential Payments upon Termination or Change in Control

    Employment Agreement and Potential Payments upon Termination or Change in Control Harold M. Messmer, Jr., Chairman of the Board and Chief Executive Officer, has an employment agreement with the Company terminating December 31, 2021. Under the current terms of the employment agreement, Mr. Messmer will receive a base annual salary of not less than $525,000 and is entitled to receive certain benefits, including life insurance and tax planning. (Mr. Messmer has waived these benefits for 2017 and every year since 2007.) In the event the employment of Mr. Messmer is terminated (a) involuntarily other than for Cause (see Appendix B for a definition of this term), (b) by reason of a constructive termination of Mr. Messmer’s employment resulting from a material breach of the employment agreement by the Company, or (c) voluntarily within one year following a Change in Control of the Company (see Appendix B for a definition of this term), he is entitled to receive severance compensation. The amount of such severance compensation shall be (i) the then-lump sum present value of the amount he would have received if his base salary (at the rate payable at the time of such termination) had been paid through the then-effective term of the agreement and (ii) the then-lump sum present value of the amount he would have received if a yearly bonus in an amount equal to the annual cash bonus for the last full calendar year completed prior to the termination (including any bonus pursuant to the Annual Performance Bonus Plan) had been paid yearly through the then-effective term of the agreement. If Mr. Messmer’s employment is terminated by reason of death or disability, he or his estate will receive only 75% of the base salary he would have received through the then-effective term of the agreement and will not receive any amount in lieu of bonus. If Mr. Messmer’s employment terminates other than for Cause, he and his wife will each continue thereafter to participate in the Company’s healthcare plan for its employees, at the Company’s expense, until his or her death. For one year following termination, Mr. Messmer is prohibited from competing with the Company’s personnel services business, employing any officer of the Company or soliciting any officer of the Company to leave the Company. Since 1990, the terms of the employment agreement have provided that it automatically renew on each December 31 for an additional year without further action by the Company or Mr. Messmer and without formal amendment. Severance Agreements have been entered into with Messrs. Messmer, Waddell, Gentzkow and Glass. Each Severance Agreement provides that the employee will be paid a lump sum equal to two years’ base salary (2.99 years if the employee has served as a director) if his employment is terminated (a) without Cause (see Appendix B for a definition of this term), (b) voluntarily by the employee following a reduction by more than 5% of the employee’s base salary per month or (c) voluntarily by the employee following a request by the Company that the employee relocate more than 50 miles away from the current location of the principal executive offices of the Company. The terminated employee will also receive a pro rata share of any bonus he would otherwise have received pursuant to any bonus plan if his employment had not been terminated. However, if the termination occurs within one year following a Change in Control of the Company (see Appendix B for a definition of this term), then in lieu of the foregoing bonus payment the employee will receive a lump sum equal to twice the prior year’s bonus (2.99 times the prior year’s bonus if the employee has served as a director). Notwithstanding the foregoing, no individual shall receive salary and bonus payments under both his Severance Agreement and any other agreement. Instead, only the greater of such benefits provided by either agreement shall be paid. In the event of such a termination, (1) outstanding restricted shares would remain outstanding subject to any pending performance conditions, but any time-based vesting requirements would cease to apply, and (2) outstanding options would remain outstanding until their normal expiration date. Any amounts accrued for the employee’s benefit under the Senior Executive Retirement Plan would also become fully vested. The individual will continue to receive all employee benefits in effect on the termination date, including, but not limited to, medical and life insurance payments, for two years following termination (2.99 years if the employee has served as a director). In addition, if the employee has served as a director, the foregoing benefits will be provided in the event of any voluntary termination within one year following a Change in Control. The Agreements also provide that any termination of his employment (other than a termination by the Company for Cause) after age 60 (age 53 if the employee has served as a director) will entitle him and his wife, at the Company’s expense, to each continue to participate in the Company’s healthcare plan for its employees or receive equivalent coverage, until his or her death, at the greatest level provided at any time since April 2009. The Company has entered into Part-Time Employment Agreements with each of Messrs. Messmer, Waddell, Gentzkow, Glass and Buckley. Each agreement provides that the employee will be retained as a part-time employee for a four-year period following retirement. The individual will provide advice and counsel as requested during the part-time employment period and will be prohibited from competing with the Company’s staffing services business or soliciting any employee to leave the Company during that period. In return, the individual will receive annual compensation during the part-time employment equal to 8% of the average annual cash base salary and bonus (including any bonus pursuant to the Annual Performance Bonus Plan) paid for the five full calendar years during the ten full calendar years preceding the Part-Time Employment Commencement Date that had the highest Yearly Cash Compensation, and stock option and restricted share awards made prior to retirement will remain outstanding and continue to vest in accordance with their original vesting schedules. For purposes of the Agreements, retirement is defined to be any termination by the employee of his employment subsequent to the later of age 55 or 20 years of service. Messrs. Messmer, Waddell, Gentzkow and Glass are currently eligible for retirement under this provision. The Stock Incentive Plan, pursuant to which all equity grants to executive officers subsequent to October 2004 have been made, provides that any award held by an executive officer will vest upon such individual’s death or disability. The only grants that have been made under this plan to executive officers are performance share grants. For more details regarding the Stock Incentive Plan, see the discussion below the “Grants of Plan-Based Awards” table. The Annual Performance Bonus Plan, pursuant to which performance-based cash bonuses are paid to executive officers, provides for a pro-rated bonus to be paid to the estate of any executive officer in the event of such officer’s death during the year. For more details regarding the Annual Performance Bonus Plan, see the discussion below the “Grants of Plan-Based Awards” table. The Deferred Compensation Plan and the Senior Executive Retirement Plan each provide that all vested amounts will be paid following disability or termination of employment for any reason. For more details regarding these two plans, see the discussion below the “Nonqualified Deferred Compensation” table.

  54. CEO Pay Ratio

    CEO Pay Ratio As required by Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, we are providing the following information about the relationship of the annual total compensation of our employees and the annual total compensation of our CEO. The pay ratio included in this information is a reasonable estimate calculated in a manner that is intended to be consistent with Item 402(u) of Regulation S-K. As of October 20, 2017 (our determination date), our global employee population consisted of approximately 91,000 individuals, approximately 84% of whom were employed as temporary employees through one of the Company’s staffing lines of business, with the remainder employed as full- or part-time personnel in the corporate and field offices of the Company and its consolidated subsidiaries. To determine our median employee, we drew from our entire population a statistical sample designed to be representative of the demographics of our employee population. We then identified the median employee based on all taxable wages earned by each individual in the sample group during calendar 2017. For 2017, our last completed fiscal year, the median of the annual total compensation of all Company employees (other than our CEO) was $17,340 and the annual total compensation of our CEO was $8,799,147. Accordingly, for 2017, the ratio of the annual total compensation of our CEO to the median of the annual total compensation of all employees was 507 to 1. In contrast, if we exclude temporary employees from our calculations, the median annual total employee compensation increases to $62,334, making our internal pay ratio 141 to 1, which we believe would be a more accurate representation of how our CEO’s pay compares to that of our regular workforce.

  55. 2017 Director Compensation

    2017 Director Compensation

  56. 2017 Director Compensation

    | Name | Fees Earned or Paid in Cash | Stock Awards(a) | Option Awards | Non-Equity Incentive Plan Compensation | Change in Pension Value and Nonqualified Deferred Compensation Earnings | All Other Compensation | Total | | Andrew S. Berwick, Jr.(b) | $49,500 | $0 | $0 | $0 | $0 | $0 | $49,500 | | Marc H. Morial | $50,063 | $279,594 | $0 | $0 | $0 | $0 | $329,657 | | Barbara J. Novogradac | $66,563 | $279,594 | $0 | $0 | $0 | $0 | $346,157 | | Robert J. Pace | $53,500 | $279,594 | $0 | $0 | $0 | $4,709 | $337,803 | | Frederick A. Richman | $76,816 | $279,594 | $0 | $0 | $0 | $0 | $346,410 |

  57. 2017 Director Compensation

    | (a) Consists of restricted shares granted under the Stock Incentive Plan. All amounts under the “Stock Awards” column represent grant date fair value of the underlying stock at the date of grant computed in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718. Pursuant to the SEC rules, the amounts shown exclude the impact of estimated forfeitures related to service-based vesting. As of December 31, 2017, Ms. Novogradac and Messrs. Pace and Richman each held 15,401 restricted shares. Mr. Morial, who joined the Board in March 2016, held 11,403 restricted shares. |

  58. 2017 Director Compensation

    | (b) Mr. Berwick retired from the Board in May 2017. |

  59. 2017 Director Compensation

    Cash fees for outside directors are as follows: (1) an annual fee of $40,000 for service on the Board, (2) a fee of $1,500 for each Board meeting attended, (3) a $3,000 annual fee for service on each of, as applicable, the Audit Committee, the Compensation Committee, and/or the Nominating and Governance Committee, and (4) an additional annual fee of $15,000 for serving as Chairman of the Audit Committee, the Compensation Committee or the Nominating and Governance Committee. All outside directors also receive reimbursement for travel and other expenses directly related to activities as directors. Decisions regarding our non-employee director compensation program are approved by our full board of directors based on recommendations by our compensation committee. In making such recommendations, our Compensation Committee takes into consideration the director compensation practices of competitors and other companies and whether such recommendations align with the interests of our shareholders. Like our executive officers, our Compensation Committee reviews the total compensation of our non-employee directors and each element of our director compensation program annually. In 2015, the Board changed to a value-based approach for outside director equity grants to avoid fluctuations in compensation that may arise from a share-denominated approach. Because the value of equity grants may fluctuate significantly depending on the Company’s stock price, a value-based approach ensures that directors receive equity grants that have the same value on the grant date year after year and are appropriately compensated for the services they provide. Prior to 2015, outside directors were granted 6,200 restricted shares each year on the date of the annual meeting. On May 24, 2017, the date of the Company’s 2017 annual meeting of stockholders, Messrs. Morial, Pace and Richman and Ms. Novogradac each received a grant of 6,102 restricted shares under the Stock Incentive Plan. The closing price of the Company’s stock on the date of grant was $45.82 per share, so the grant date fair value of each award was $279,594, approximately the same grant date value as the 2016 grant of equity to outside directors. Each of the foregoing grants is subject to a time vesting condition which provides for the vesting of 25% of the grant on each of May 1, 2018, May 1, 2019, May 1, 2020, and May 1, 2021. Notwithstanding the foregoing, each grant will vest upon the recipient’s retirement (except under certain specified circumstances), death, termination due to total and permanent disability, or the occurrence of a Change in Control (see Appendix B for a definition of this term). Mr. Richman is eligible for retirement under the foregoing provision. Equity grants with approximately the same grant date value as our fiscal 2017 director equity grants will be made to our continuing outside directors on the date of the Meeting.